Intel’s big gamble contains contradictions 24 Mar 2021 The chip giant will spend $20 billion so that it can ramp up production of advanced chips for itself and others. This eats up cash flow and exposes a tension. Potential customers may also be rivals that don’t want the U.S. company’s new strategy to be a roaring success.
Carbon markets have a Goldilocks problem 24 Mar 2021 Europe’s lowball carbon prices used to be a joke. Since the EU acted to clear a permit glut, they’ve spiked above 40 euros a tonne to a level just right to drive CO2 cuts. The challenge is to stop a political backlash if financial interlopers ramp prices too far, too quickly.
Carrefour makes most of French M&A exceptionalism 24 Mar 2021 After seeing its own takeover blocked by President Emmanuel Macron, the Paris-based retailer is buying Brazil’s third-largest grocery chain. The $1.3 bln price is reasonable, and the touted savings large. Foreign expansion is more appealing than bulking up in slow-growth France.
Tencent faces a worthy opponent in ByteDance 24 Mar 2021 Quarterly results underscore the $776 bln group's dominance in online games. A purchase of a rival studio by the TikTok owner pits the two Chinese companies against each other. With tech giants’ business practices under regulatory scrutiny, the underdog has timing on its side.
Capital Calls: Defence IPO, ViacomCBS and GameStop 24 Mar 2021 Concise views on global finance in the Covid-19 era: Italy’s Leonardo postpones the initial public offering of its U.S. unit; ViacomCBS and GameStop's rising stocks give them both a chance to raise fresh cash.
Messy Singapore deal strains to lay new foundation 24 Mar 2021 CapitaLand wants to sell its property development arm to backer Temasek and list the rest. Even if investors are willing to embrace a carve-up of the $15 bln company, achieving a desired valuation closer to peers such as Lendlease will be hard in a yield-focused market.
Geely’s electric drive is all over the road 24 Mar 2021 A new battery-vehicle unit could help the $29 bln carmaker and its Li Shufu-owned parent compete with startups like Nio. But they’re also chasing a luxury brand, contract manufacturing and a novel share-ownership scheme while shifting CEOs. A more focused route would be better.
Kuaishou’s timely pivot to advertising pays off 24 Mar 2021 The $161 bln Chinese short-video app made more money from advertising than live-streaming for the first time last quarter, and e-commerce revenue popped, mimicking bigger rival Bytedance. Expense growth slowed. That helps cushion a worrying fall in streaming revenue per user.
Frontier gets lift from puffed-up airline stocks 23 Mar 2021 The budget air carrier may be worth around $4.5 billion in its IPO, putting its valuation slightly higher than big peers like American. That’s a warranted premium when taken in isolation. But airlines have higher valuations than before the pandemic. That tailwind will disappear.
Boulder killings could break U.S. Senate’s back 23 Mar 2021 The second U.S. mass shooting in a week begs for laws favoring tougher gun checks. Like a $3 trln infrastructure plan, that measure is stalled because of arcane Senate filibuster rules. There are ways to untie the knot, but each step forward could lead to an even bigger breakup.
Serena Williams lobs a $1.6 bln SPAC headscratcher 23 Mar 2021 What do the tennis star with 23 titles under her belt, a 3D printing firm targeting a slice of a $100 bln market and a shell company founded by a big-shot hotelier have in common? Outside of the money free-for-all that is the blank-check takeover craze, pretty much nothing at all.
Guest view: The EU is tarnishing its green jewel 23 Mar 2021 The European Union’s Taxonomy is supposed to mean stakeholders can differentiate between sustainable investments and carbon-heavy ones. A new plan to treat gas as green is a huge mistake, argues Sandrine Dixson-Declève. It turns a potential global template into a paper tiger.
The Exchange: The old GE is gone and that’s ok 23 Mar 2021 Jeff Immelt ran GE for 16 years, during which time its market value roughly halved. His new book “Hot Seat” attempts to put that rocky period into context. The former GE boss chatted with John Foley about his part in the decline of an American industrial icon.
New OECD head may be West’s next anti-China weapon 23 Mar 2021 Australia’s Mathias Cormann will be the organisation’s next boss. His country is no stranger to trade disputes with Beijing. Look for the policy wonks he will lead to furnish evidence of competition-distorting practices that could help Uncle Sam and its partners push for change.
Capital Calls: Chubb/Hartford, Son of Kozmo 23 Mar 2021 Concise views on global finance in the Covid-19 era: Insurer Hartford rebuffs an offer from rival Chubb without breaking a sweat; snack-delivery outfit GoPuff raises capital at an $8.9 billion valuation, giving new life to an old Silicon Valley idea.
South Africa offers Erdogan an inflation lesson 23 Mar 2021 A steep plunge in the lira, of the sort seen this week after Turkey’s president fired his central bank boss, usually drags down the rand. Not this time. The South African currency’s resilience shows the value of a credible and independent central bank left free to control prices.
Europe’s UK vaccine threat has risky logic 23 Mar 2021 Brussels may block shipments of Covid-19 jabs to Britain amid a spat with AstraZeneca. Its ultimate threat would be to limit supplies of other remedies too, such as Pfizer’s. Even if the worst outcome is avoided, the result will be less efficient supply chains and costlier drugs.
Reckitt Benckiser cleans up spilt milk in China 23 Mar 2021 The company will exit the increasingly competitive infant-formula market, selling its Chinese unit for over $2 bln, Reuters reports. That’s less than half the price it paid in 2017, Jefferies calculates. Boss Laxman Narasimhan would have suffered much worse had he soldiered on.
Chinese retail investors deserve more respect 23 Mar 2021 Stereotyped for playing $3 trln of shares like poker chips, local traders are getting sophisticated even as amateurs upend U.S. markets. Structural reforms, crackdowns on shadow credit and tech upgrades have attracted more sober savers. They might cushion falling markets.
China’s Quora haunted by own existential question 23 Mar 2021 Zhihu, the country’s largest online Q&A platform, seeks a $6.4 bln valuation in a New York IPO. It narrowed losses and doubled sales last year thanks to a membership drive, but the business plan has holes. The price also looks extremely rich given peers’ struggles.
Exxon’s inexperienced board leaves it exposed 22 Mar 2021 The $240 billion oil giant’s shares have fallen by more than a third in five years. Even with three new members, energy experience is limited. Showing shareholders that it will be solid stewards of capital is imperative. Otherwise, rival Chevron has a takeover opening.
Breakdown: Carbon border tax isn’t about carbon 22 Mar 2021 Europe and the U.S. look like they are upping their climate game by mulling a levy on high-carbon imports. But it’s also a way to level the playing field. Companies end up with less reason to move to high-polluting places like China; domestic firms get credit for staying.
Apollo at least manages one very clean exit 22 Mar 2021 The investment manager is merging Tech Data, a $7.2 bln company that it bought for $6 bln less than a year ago, with Synnex. It will ink a tidy paper profit of $2 bln. Unlike the departure of its founder, Leon Black, this is one its investors should have no trouble comprehending.
New BaFin boss adds teeth to watchdog’s turnaround 22 Mar 2021 Mark Branson, current head of Swiss regulator FINMA, will lead the German supervisor reeling from scandals like Wirecard. His task is made harder by the government’s weak reforms. Its willingness to appoint an outsider, however, offers the hope of a much-needed cultural change.
Banks’ climate pledges suffer from water scarcity 22 Mar 2021 It barely gets a mention in Wall Street’s net-zero goals. Yet water accounts for a good slug of carbon emissions and 90% of global warming-related crises from U.S. droughts to Australia’s floods. Banks can speed toward sustainable finance by paying attention to the resource.
Capital Calls: Leon Black, Happiness index 22 Mar 2021 Concise views on global finance in the Covid-19 era: Apollo’s founder still has his imprint on the Museum of Modern Art and Dartmouth College; people are proving surprisingly resilient in the pandemic, a recent poll suggests.
Aramco’s next share offer is just as hard a sell 22 Mar 2021 The $1.9 trln Saudi oil giant’s annual results showed Covid-19 scars. If Riyadh sells more shares, Aramco’s low costs and spare capacity may be appealing to non-Saudi investors that largely sat out its 2019 IPO. But many environmental, social and governance red flags remain.
Suez brings water pistol to French sewage shootout 22 Mar 2021 CEO Bertrand Camus proposed carving up the group or swallowing an “irreversible” poison pill if Veolia doesn’t raise its 11.3 bln euro bid. Rival boss Antoine Frérot can afford to pay more. But in the absence of other bidders he can first try to kick out Suez’s board.
Danone’s purpose will survive chairman’s departure 22 Mar 2021 Emmanuel Faber’s sustainability credentials did not prevent the yoghurt maker from ousting him. But fears the group will disavow its ESG ideals are misplaced. The standards are embedded in the French company’s operations and legal status. Besides, investors still support them.
Blackstone’s Aussie gamble may tempt more players 22 Mar 2021 The buyout shop’s $6.2 bln offer for Crown is highly conditional, sensibly so given the casino operator’s regulatory nightmare. But the low-ball bid could encourage others like Sands to try their luck. A knockout price would give Blackstone a good exit on its existing 10% stake.